Mattel Outperforms Hasbro in Q4, Stock Soars

Key takeaways

Mattel (MAT) outperformed peer Hasbro (HAS) with its fourth-quarter financial performance, following which its stock jumped more than 25%. Mattel, which reported its fourth-quarter earnings results on February 7, crushed analysts’ estimates on both the sales and earnings fronts thanks to the stellar sales of Barbie and Hot Wheels.

In the fourth quarter, gross sales for Mattel’s power brands were $1.2 billion, down 6% YoY (year-over-year). Gross sales of Barbie were up 12%, and gross sales of Hot Wheels were up 9%.

In comparison, Hasbro, which posted its fourth-quarter earnings results today, underperformed in the fourth quarter and missed analysts’ estimates. Currency volatility, reduced retail inventory in Europe, and lost revenue from Toys “R” Us adversely affected its financials.

Fourth quarter by the numbers

Mattel posted net sales of $1.5 billion, which came in ahead of analysts’ estimate of $1.4 billion but fell ~5% on a YoY basis. Mattel’s adjusted gross margin came in at 46.6% compared to 32.0% in the previous year’s quarter. Cost savings and lower inventory obsolescence expenses more than offset the negative effects of inflation in input costs and higher labor costs. Mattel reported adjusted EPS of $0.04 in the fourth quarter, which compared favorably to its EPS of -$0.82 in the previous year’s quarter. Analysts had expected Mattel to report EPS of -$0.16 in the quarter.

Hasbro, on the other hand, disappointed investors. Hasbro posted net sales of $1.4 billion, which fell short of analysts’ estimate of $1.5 billion and decreased ~13% on a YoY basis. Meanwhile, the company posted adjusted EPS of $1.33, missing analysts’ estimate of $1.67. Hasbro shares were down this morning.